Action call over Ulster terrorists' petrol scam.

GOVERNMENT ministers have been accused of turning a blind eye to a bootleg petrol racket providing cash for Northern Ireland's terror gangs.

The scandal now threatens to give brutal protection squads a foothold in mainland Britain.

Chancellor Gordon Brown's Treasury has dismissed calls for action because the cost of the scam in Northern Ireland is small compared with the pounds 20 billion fuel taxes raise throughout the UK every year.

Campaigners believe ministers have refused to take action because it would cost more to stop the racket in Northern Ireland than to ignore it.

But the Petrol Retailers' Association (PRA) has revealed that tankers full of petrol and diesel are being smuggled on to the mainland.

The PRA believes the Midlands could be the next major region of the country to be flooded with the bootleg fuel.

Privately-owned filling stations will face the stark choice of their Ulster counterparts: either stock the illicit fuel, go out of business - or be put out of business by the terror gangs.

Garage owners who agree to sell the cheap fuel stand to make as much as 40p a litre on petrol - compared with the 2p a litre the Chancellor leaves them after taking his cut.

Out of every pounds 10 tank of petrol, the Chancellor takes pounds 8.

The surge into Britain is happening because the terrorist-backed gangs in Ulster have saturated the market there with cheap petrol and diesel smuggled over from the Republic.

The cheap-petrol culture is so ingrained in Northern Ireland that a Government quango - the Western Education and Library Board in Derry - is saving itself pounds 1,500 a month by buying its petrol from across the border.

And every week, thousands of people drive south to shop and fill their tanks.